The Office of Attorney General Eric T. Schneiderman has recently announced that they had just reached a settlement with fine-dining restaurant Per Se concerning a 12% service charge that was not paid to the restaurant’s wait staff. The said charge amounted to a total of $500,000.
The charges came from private dining and banquet service contracts that Per Se had between the periods of January 2011 and September 2012. In a copy of the settlement, the Office of the Attorney General states that Per Se had violated “Article 6 (regarding payment of wages), Section 196-d (regarding tip appropriation) of the New York Labor Law (“NYLL”); and New York Codes, Rules and Regulations (“N.Y.C.R.R”), Title 12, Chapter II, Subchapter B, Part 146 (“Hospitality Wage Order”).”
The Office of the Attorney General has found that while Per Se had paid their wait staff rates (between $16.60 to $28.00 an hour) that are said to be “considerably in excess of state minimum wage rates which were applicable during the relevant time period,” their investigation also revealed that what they had charged clients as “service charge” was used instead to “pay the full range of expenses routinely incurred by Per Se, including cost of goods, rent, marketing, utility, maintenance, and employee wages and benefits, among other things.” Needless to say, fees collected as service charge were not given as gratuities to employees who worked during Per Se’s private dining events.
According to the New York Department of Labor, the Hospitality Wage order requires that “A charge for the administration of a banquet, special function, or package deal shall be clearly identified as such and customers shall be notified that the charge is not a gratuity or tip.” Moreover, the Department of Labor asserts that an “adequate notification” must be given to customers and it shall be included in the contract, menu and bill listing prices. Moreover, it is required to appear in a similar font size as the rest of the document with a minimum 12-point font.
According to findings of the Office of the Attorney General, there were email inquiries from private dining customers seeking for clarification of the 12% charge during the said period. Per Se’s staff reportedly replied to them, saying the 20% charge is for “service” or “gratuity.”
Meanwhile, Per Se is required to come up with a list of employees that will be eligible to receive the said tips. DNAinfo reports around 60 to 70 workers will be eligible to receive the delayed gratuity payment.
The New York Times has once said that Per Se “may be the best restaurant in New York City.” It was opened by Thomas Keller back in 2004 and is part of the Thomas Keller Restaurant Group. The restaurant has, so far, already been awarded three Michelin stars. It’s tasting menu reportedly charges a fixed price of $310 per person.
In response to this, a Per Se spokeswoman has told DNAinfo, “Our employees were never short-changed and no monies intended for employees were withheld. Our employees are among the best compensated in the restaurant industry because they are the best in the business…a waiter at Per Se, for example, including overtime and gratuities, makes approximately $116,000 a year.”